1. It has been accepted in the literature by now that bone marrow stromal cells (a subset of which are mesenchymal or skeletal stem cells) can suppress activation of T cells both in vivo and in vitro. We continued to study this effect of bone marrow stromal cells in infectious disease and allergic disease models in mice. We continued and finished our studies on the mechanism of how intravenously injected bone marrow stromal cells (BMSCs) affect a mouse model of asthma induced by ragweed. We confirmed that the injections significantly improve lung scores (which mirrors lung function) in asthmatic mice and showed that the injected BMSCs in the asthmatic (Th2) environment will produce high amounts of TGF&#946;that significantly decreases the airway response and improves the lung function of the mice with induced asthma. We also demonstrated that activation of the IL-4 receptor and the STAT pathway are responsible for this effect. We have finished the mouse study and published our results in PNAS(Nemeth K, A Keane-Myers, JM Brown, DD Metcalfe, JD Gorham, VG Bundoc, MG Hodges, I Jelinek, S Madala, S Karpati and E Mezey. (2010). Bone marrow stromal cells use TGF-beta to suppress allergic responses in a mouse model of ragweed-induced asthma. Proc Natl Acad Sci U S A 107:5652-7). 2. In another project we studied the regulation of mast cell degranulation by BMSCs. Mast cells (MCs) have a central role in allergic responses, including certain types of asthma and in the development of autoimmune disease. These cells represent an important link between innate and acquired immunity. We studied the interaction between mouse bone marrow-derived stromal cells and mouse bone marrow derived MCs and found that BMSCs can efficiently suppress several MC functions in vitro as well as in vivo. When MCs are cocultured with BMSCs directly (allowing cell to cell contact), the BMSCs suppress MC degranulation, proinflammatory cytokine production, chemokinesis, and chemotaxis. Similarly, MC degranulation within mouse skin or the peritoneal cavity was suppressed following in vivo administration of BMSCs. Further, we demonstrate that these inhibitory effects were dependent on upregulation of COX2 in BMSCs and facilitated through the activation of EP4 receptors on MCs. Based on these data we suggest that BMSCs might represent a novel cell based therapeutic approach in the treatment of MC driven allergic diseases. We have submitted our work to the Clinical and Experimental Allergy where it is currently being reviewed.